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Customer reviews - a great indicator of social proof

January 30, 2015

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By: Trusted Shops

Trusted Shops

Trusted Shops

In the real world of bricks and mortar, we can see if a shop is busy, or if people are lining up outside the door of a restaurant. We look for these indicators to guide our choices, to provide the social proof we need to validate our decisions. However, in cyberspace, with the behaviour of other people not directly visible, we rely on other indicators of social proof – customer reviews.

Online reviews have become a powerful weapon in the battle for our hearts and minds, and more importantly, our wallets. When it comes to recommendations, unsurprisingly a lot of us rely on friends and family. According to a recent MyCustomer survey, 90 per cent of consumers trust recommendations from people they know. What is perhaps surprising, is the fact that 89 per cent of consumers are just as willing to trust reviews posted online by complete strangers. Essentially, consumers put almost as much faith in the reviews of anonymous people posting on websites as they do in those they know and trust.

This presents a unique opportunity for retailers. Consumers trust customer reviews 12 timesmore than they do the manufacturers’ own descriptions. It may not come as a complete shock that marketing content designed to sell us products is sometimes viewed with scepticism. Nonetheless, for consumers to trust anonymous strangers more - by a factor of 12 – demonstrates just how powerful customer reviews can be.

Customers that read reviews are more than twice as likely to make a purchase, and on average spend 11 per cent more than those that don’t. The travel sector, in particular, is one where people tend to place a lot of faith in the opinions of others, with 45 per cent of personal travelers planning trips based on reviews, and 54 per cent of business travelers.

Most people will be familiar with sites like Tripadvisor and Yelp, and many will have used them for recommendations themselves. But the anonymity provided by the internet enables people to write virtually anything they want, as anyone who has spent time on Twitter can attest to. Stories of rival restaurateurs posting ‘grudge’ reviews on websites are infamous, and last year the BBC reported that Tripadvisor was being investigated in Italy over concerns the site was not doing enough to prevent fake reviews.

But with consumers placing so much emphasis on online reviews these days, how can retailers insure against fraudulent complaints masquerading as legitimate customer reviews? Closed review platforms ensure that customers must be verified. If the platform is open then it's easy for fakereviews to slip through the net – exposing businesses to fraudsters or malicious actions. In tandem with these platforms retailers can remove some of the anonymity in reviews, by connecting reviewer profiles to social profiles, which adds a layer of authentication and deters many people from posting fake comments. Of course, there’s nothing to stop people creating false social profiles in order to write ‘grudge’ reviews, but the extra effort required should definitely put off the casual offenders.

Ultimately, bad reviews (whether fake or legitimate) are inevitable, and in some cases even welcome. Customers are smart, and know that retailers aren’t perfect. Sometimes stock runs out, sometimes a courier service will be late – these are things that customers get frustrated over, but understand the fact that they occasionally happen. When the service delivered is anything less than perfect, it’s a chance for retailers to acknowledge their shortcomings and act to remedy the situation.

If a customer posts a bad review on your website, the two most important things to respond with are speed and professionalism. By replying quickly, you demonstrate that you’re proactive in dealing with problems. By dealing with the situation professionally, it reflects well on your business as a whole, and reassures people that you can handle it when things don’t go according to plan. By building a rapport with the customer after a bad review retailers can rectify the damage with relative ease, and this approach certainly works better than a case that came to light in August last year which reported that the Union Street Guest House took $500 out of event bookers’ fees when visitors left bad reviews online.

Another interesting story in the press was the Facebook news that it recently sued scam artists who sold fake likes to businesses. This highlights another approach for retailers to avoid. Bumping up likes, followers or reviews with fakes fails to meet the business objective of making sales. Fake customers will never convert into paying customers as they fit into two categories, those with fake accounts, who will devalue the business profile and discourage trust. Or hacked accounts, whose owners are likely not the target customer. Customers want to see that the type of people endorsing a brand are engaging in things that interest them – not the thousands of likes or reviews on the page.

Fake reviews and professional complainers aside, online recommendations are a great way to provide the social proof people crave to validate their purchasing decisions. When collected, managed and displayed effectively, they prove to be a recipe for high conversion.